fmc technologies 2007ar

Positioned for the
Future

2007 Annual Report

named No. 1 MOST ADMIRED oil and gas equipment,
service company
by FORTUNE Magazine
annual survey 2005, 2006 & 2008

FMC Technologies, Inc. (NYSE: FTI) is a diversified, global corporation and a leader within the
oil and gas equipment and services industry. We design, manufacture and service innovative
technologies and unique solutions that allow our customers to succeed in solving their most difficult
business challenges. FMC Technologies maintains a persistent focus on health, safety and the
environment, and our 33 manufacturing facilities in 19 countries are committed to the communities
in which they operate. Our industry experience, management depth, high ethical standards,
strong customer relationships and global presence provide the foundation for our strong performance.

FMC Technologies, Inc. Annual Report 2007

Company Profile 2

Financial Highlights 3

Letter to Employees & Shareholders 4

Operations Review 10

Technology & Innovation 16

Corporate Responsibility 24

Board of Directors & Officers 26

Glossary 28

Management’s Discussion & Analysis 29

Financial Statements 45

people, technology, growth 1


NYSE: FTI
Ticker Symbol

2007

Incorporated 2000

Employees 13,000

Manufacturing Facilities 33

Countries in Which We Operate 19

Orders $6.9B

Backlog $4.9B

Revenue $4.6B

Earnings Before Interest and Taxes $473M

5-Year Revenue Growth Rate 19%

Diluted Earnings Per Share (EPS) from Continuing Operations $2.30

Capital Expenditures $203M

5-Year Subsea Tree Market Share 42%

Web Site fmctechnologies.com

Market Focus

Subsea Systems
Subsea Production Systems Subsea Processing Systems Riserless Light Well Intervention
Energy Production

Electric Subsea Technology Through Tubing Rotary Drilling Gas Compression

Separation Technologies
Gas and Liquid Separation Subsea Separation

Surface Wellhead
Conventional, Thermal and High-Pressure / High-Temperature Wellheads Fracturing Equipment
Mudline Drilling and Completion Equipment

Fluid Control
Valves Pumps Compact Valves Swivel Joints
Energy Processing

Measurement Solutions
Liquid and Gas Measurement

Loading Systems
Fluid Loading and Transfer

Material Handling Solutions
Bulk Conveying and Processing Material Handling Systems

2

FMC Technologies, Inc. Financial Highlights

2007 2006
(In millions, except per share and common stock data)

Total Revenue $ 4,615.4 $ 3,755.6
Income from continuing operations $ 307.5 $ 210.9
Diluted Earnings Per Share:
Income from continuing operations (1) $ 2.30 $ 1.50
Financial and Other Data:
Shares outstanding (1) 129.3 134.5
(1)
Common stock price range
Low $ 27.76 $ 22.50
High $ 66.86 $ 35.67

Net debt (2) $ 0.2 $ (138.9)
Order backlog (3)
At December 31 $ 4,881.7 $ 2,645.2

(1) All share information has been adjusted for the two-for-one stock split on August 31, 2007.
(2) Net debt consists of short-term debt, long-term debt and the current portion of long-term debt, less cash and cash equivalents.
(3) Order backlog is calculated as the estimated sales value of unfilled, confirmed customer orders at the reporting date.

Energy Processing Systems

17%

Energy Production Systems
21%
62%
Non-Energy Businesses

2007 Revenues: $4.6B 3

Shareholders Letter

FMC Technologies had an outstanding 2007, recording our sixth Our Successes
consecutive year of sales and earnings gains. Sales for the year
Our advanced technologies and
increased 23 percent to $4.6 billion and earnings per share from
strong customer relationships
continuing operations rose 53 percent to a split-adjusted $2.30. Our
resulted in record inbound
growth was driven by a talented, worldwide employee base that now
orders during 2007. Among the
exceeds 13,000 individuals. FMC Technologies accomplished a
projects awarded to FMC last
number of firsts during 2007, most importantly, the deployment of
year was Total’s Pazflor project,
our subsea separation technology at the Tordis field in the
located offshore Angola. Valued at
Norwegian North Sea. In addition, shareholders were rewarded with
approximately $980 million in
the first-ever stock split in FMC’s history as a public company.
revenue, Pazflor is our largest subsea
Our continued growth during 2007 included the receipt of the largest
project award received to date.
subsea order in our history. We also began the process of
Pazflor is the fourth subsea separation
spinning-off our FoodTech and Airport Systems businesses so we can
project announced within our industry
remain focused on providing technology solutions for the energy
in the last two years, and FMC has
industry. It was, indeed, a remarkable journey in my first year as
been the recipient of all of these
your President and Chief Executive Officer.
projects, which are located in four
major deepwater basins across the
Our Growth in 2007 globe. We are very honored to have
been awarded all four contracts and
• Total company backlog increased to a record $4.9 billion.
believe our selection is the result of
• Subsea backlog increased to $3.9 billion. our advanced technologies and our
position as the subsea pioneer and subsea leader in our industry. In
• Energy Production Systems revenue grew 28 percent to
addition to Total’s Pazflor project, our subsea processing technologies
$2.9 billion.
will also be utilized in Shell’s BC-10 project in Brazil, Shell’s Perdido
• Energy Processing Systems revenue increased 14 percent to project in the Gulf of Mexico and StatoilHydro’s Tordis project in the
$768 million. Norwegian North Sea. Our people and innovative technological
developments have truly set us apart in our industry. Our valued
• FoodTech and Airport Systems generated revenue of
customers recognize this and rely upon us every day. These
$593 million and $384 million, respectively.
capabilities will continue to drive our successes as our customers
continue to focus on deepwater developments.

Adjusted EPS from Continuing Operations (1)
Revenue $B
Inbound $B

$6.9 5.0 2.5
7.0
$2.30
$4.6
4.5
6.0
4.0 2.0
$3.8
5.0 3.5
$4.5
$3.1 $1.50
3.0 1.5
4.0
$3.5 $2.5
2.5
$3.0 $2.2
$1.00
3.0
$1.8 $1.9
2.0 1.0
$2.3
$2.1 $1.9 $.73
1.5
2.0
$.52
1.0 0.5 $.38 $.41
1.0
.5
0.0
0 0.0
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’01 ’02 * ’03 ’04 ’05 ’06 ’07
* Before the cumulative effect of accounting changes
(1) See reconciliation of non-GAAP measure on page 81.

4

FMC Technologies, Inc. Shareholders Letter

The success of FoodTech and Airport Systems is due to the efforts
Another significant event that occurred in 2007 was the award of our
of outstanding employees. I am proud of their many

Shareholders Letter
five-year frame agreement with StatoilHydro to provide subsea
accomplishments and believe FoodTech and Airport Systems will
equipment and associated services for the North Sea and other
continue to prosper as an independent company in the future.
potential international developments. This agreement represents
potential significant revenue for our operations as the total value of
Industry Overview and Trends
all orders to be placed under this agreement are estimated to range
from $2.6 billion to $4.4 billion. Only FMC Technologies and one Our customers have many challenges before them. They are
other company were awarded this opportunity. experiencing declining production rates from existing fields and at
the same time are seeking new opportunities for production,
These projects are just a sample of the many ongoing efforts within generally in deeper water and in more extreme environments.
our Energy Systems businesses, which represented nearly 80 percent New technologies are needed to address both of these issues.
of our 2007 revenues. Other activities during the year included This trend resulted in a 14 percent increase in worldwide E&P
increasing our ownership stake in CDS Engineering to 100 percent in spending in 2007 and in 2008 worldwide E&P spending is projected
December, two years ahead of plan. As the industry’s demand for to increase more than 11 percent. In addition, international E&P
subsea processing continues to grow, it was vital to accelerate the spending, which grew in excess of 20 percent in 2007, is expected to
timing of our ownership stake so we can leverage their expertise and increase by more than 16 percent in 2008. We expect subsea
enhance our leadership role in the growing marketplace for subsea spending will follow a similar pattern, supported by the above
separation technologies. Located in The Netherlands, CDS activity and other industry metrics, including a projected 35 percent
Engineering is the leading provider of gas and liquids separation increase in the number of existing deepwater drilling rigs over the
technology and equipment for both onshore and offshore next four years.
applications and floating production systems. The innovative and
proprietary systems of CDS Engineering have been critical to our The energy industry is also experiencing a shift in dynamics due to
subsea processing successeses. the continued emergence of National Oil Companies (NOCs) such as
Petrobras, StatoilHydro and Sonangol. FMC Technologies must
Recognizing that energy has become our core business and the remain well positioned to continue to address the unique needs of
source for our future growth, we announced in October 2007 the both International Oil Companies (IOCs) and NOCs. There are more
strategic decision to spin-off our FoodTech and Airport Systems than 100 NOCs across the world today, controlling approximately
businesses. Following regulatory approval, these businesses will 70 percent of the world’s undeveloped oil and gas reservoirs and
become a separate, publicly traded company through a tax-free producing about 50 percent of the world’s oil. NOCs are expected to
distribution to our shareholders during 2008. FoodTech and Airport be increasingly active in the recovery of their natural resources and
Systems are becoming an independent public company following a may take on roles once held solely by the IOCs, such as operators of
very successful 2007 that was marked with record revenues, field development projects. The IOCs are shifting their strategies as
operating profit and year-end backlog. Both segments are very well well, focusing on increasing recovery rates at existing wells and
managed businesses, maintain leadership positions in their respective investing in deeper water exploration projects that help them add
markets and are growing their global reach. The new company will value to the NOCs. By recognizing these and other trends, and by
be led by a veteran FMC management team. Charlie Cannon, current developing effective solutions to the technology obstacles faced by
Senior Vice President for FoodTech and Airport Systems, will serve as our customers, we can enhance our position as the industry leader in
Chief Executive Officer, and Ron Mambu, our Vice President and subsea technologies.
Corporate Controller, will become Chief Financial Officer.

Return on Investment Capital Expenditures $M Stock Appreciation

250
30
28.2
700 FTI
$203
25 S&P 500
200 600
21.2 PHLX Oil Service Sector Index
20 500
150 $138
16.6
14.2 400
15
12.5
$91
100
10.2 300
10 8.6 $65 $68 $62
200
$47
50
5
100
0
0
0
’01 ’02 ’03 ’04 ’05 ’06 ’07
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’07
’01 ’02 ’03 ’04 ’05 ’06

5


The demand for natural resources such as oil and gas is projected to Industry projections also suggest there will be a continued increase
increase for the foreseeable future. In addition, a growing number of in the construction and deployment of new deepwater drilling
Shareholders Letter

other energy sources are also being pursued. These include heavy oil, vessels, or rigs. As these rigs are deployed and the ensuing field
oil sands, shale oil, coalbed methane and tight gas. Development of, completion activities progress, the result will be an expedited
and investment in, these hydrocarbon sources is expected to increase demand for subsea products and systems. In fact, more than 75 new
as world demand grows. Our strategies position FMC to effectively rigs are expected to be delivered by 2011, further supporting growth
and profitably respond to these opportunities. in the underlying subsea business.

Shaping the Future Developing Future Technologies
FMC’s management team has identified a number of strategies to To support the growth of our subsea energy businesses, we are
effectively respond to our customers’ needs and industry trends. continually expanding our range of products and solutions. Two of
Four strategies in particular are key to shaping the future of our our most recent growth initiatives, Riserless Light Well Intervention
company: (RLWI) and Subsea Processing, which includes separation, boosting
and gas compression, have enhanced our existing portfolio of subsea
• Growing our energy business technologies and systems. We announced two new RLWI contracts
that will go into operation in 2008, one for StatoilHydro and one for
• Developing future technologies
BP. These and other technologies have provided growth avenues
• Strengthening customer relationships outside of our traditional subsea completion business. As a result,
FMC’s average order value per subsea well has more than doubled in
• Investing in our employees
the last four years to approximately $19 million in 2007. We expect
Growing Our Energy Businesses that new technology developments will also contribute to growth in
areas outside the traditional subsea market.
Our subsea products remain the largest and fastest growing segment
of our business and accounted for 49 percent of FMC’s total revenues
Equally important to our growth is the continued development and
in 2007. Over the last five years, revenue in our subsea business has
expansion of our surface wellhead and fluid control businesses. Our
increased at a 27 percent compound annualized growth rate (CAGR)
surface wellhead business is driven by global drilling and completion
and we have clearly remained the market leader in the sector. The
activity. Growth in this area has been enhanced by recent
subsea production market is forecast to continue its current growth
acquisitions of businesses, including Netherlands-based VOS
rate as customers venture into deeper water in search of
Wellhead as well as the 2006 purchase of Canada-based Galaxy
hydrocarbons and the complexity and sophistication of
thermal wellheads. Our surface wellhead business is also benefiting
equipment on the seabed increase.
from our investments in the development of specialized fracturing
rental equipment. FMC Technologies will continue to seek strategic
acquisitions as we look to expand our scope, improve our technology
focus and strengthen our position in key markets. Growth in the fluid
control market is driven by drilling activities, including pressure
pumping activities. We are fortunate to be the leading equipment
supplier to this market and will continue to focus on product
availability, technology and aftermarket services.

Employees

14,000

12,000

10,000

8,000

6,000
2001 2002 2003 2004 2005 2006 2007

6


We must maintain an appropriate manufacturing capacity to meet We also continue to increase the level of local participation at our

Shareholders Letter
the future equipment and technological needs of our customers. facilities in the communities where we operate. We accomplish
Capital expenditures for 2007 were approximately $203 million, added involvement in our deepwater projects through the hiring of
primarily for the expansion and construction of new manufacturing local employees and the use of local suppliers and other expertise
and service facilities across the globe as well as investments in RLWI that exists in each region. By utilizing local businesses, we are able to
tools and equipment. Our subsea tree production capacity will meet the expectations of our customers while infusing capital and
increase to approximately 335 trees by the end of 2008. This increase economic opportunities into the communities in which we operate.
in capacity will accommodate the expected demand levels we project Whether in Angola, Brazil, Malaysia, Nigeria, Norway or Russia, we
for our subsea products and systems. We will continue to assess the continue to set the standard for inclusiveness by working together
need to add future capacity beyond this level. within our communities. For example, two recently announced
projects — Shell’s Gumusut-Kakap and Total’s Pazflor — will be
Strengthening Customer Relationships supported by local suppliers and new employees hired into our
We achieved many successes with our customers during the past operations in those regions. For Gumusut-Kakap, our Malaysian
year while solidifying our position as a global company with a facilities in Nusajaya and in Kuala Lumpur will provide local
regional focus. Projects in the Gulf of Mexico, West Africa, the manufacturing and project assistance, while Pazflor will be supported
North Sea and in deepwater offshore Australia and Brazil have by our base in Luanda, Angola. FMC Technologies is aligned across
resulted from our relationship building and collaborative its subsea businesses with interchangeable project management
technological developments. We will continue to add value and processes, quality systems, engineering standards, supply
provide technological expertise to our customers in 2008 while management, manufacturing/assembly practices and offshore
differentiating ourselves from our competition. procedures. As a result, FMC is able to support its customers
seamlessly with solutions so they can successfully execute their
We have strong relationships with all of our customers. We value the projects anywhere in the world.
trust and confidence they place in our people and our advanced
Investing in Our Employees
technologies. Subsea exploration is vital to our growth, to the
sustainability of our industry and to the success of our customers. Our investments are not limited to acquisitions and facility
As the depths in which we operate continue to increase and become expansions. We understand that to maintain and widen our position
more challenging, so too must the sophistication and complexity of as the industry leader, we must continue to aggressively attract and
our technological solutions. FMC has demonstrated an unparalleled retain the most talented employees in the industry. Throughout our
ability to provide value-added products and services and to respond organization — from engineering, manufacturing and project
to the unique needs of our customers. To expand upon our management professionals to administrative and service personnel
leadership position in the industry, we must continue to execute — we must continue to hire individuals who are committed to
in the same manner. developing long-term customer relationships and innovative

investing in our employees 7


Health, Safety and Environment (HSE)
technological solutions. Our strong historical performance is
attributable to our talented employees and innovative technologies,
Shareholders Letter

FMC understands that active participation in the areas of Health,
both of which will continue to drive our future growth.
Safety and Environment means adapting a culture that is protective
of our people, our communities and the impact we have on the
We also recognize that education and training are necessary to
environment.
community development and individual successes. By partnering
with local educational institutions in many of the countries in which
FMC has a very commendable record of driving HSE focus in all we
we operate, we have laid the foundation to develop future managers
do. We have made significant advances in workplace safety,
by exposing them to the skills and fundamentals of our industry.
employee health and environmental protection. The statistics bear
FMC currently maintains recruiting partnerships and programs with
this out, including record-setting performance in lost workday and
universities in Brazil, Norway, Russia, Scotland, Singapore and the
total recordable incident rates. In light of such excellence, it is also
United States. In many of these partnerships, we even develop
imperative that we recognize the rapid pace at which our company is
curriculum and provide internship opportunities to students, offering
growing, understanding that growth in itself presents a challenge.
them a glimpse of the many facets of our industry.
We must then constantly educate and raise the accountability and
awareness of all our employees, by cultivating a sound HSE culture.
Of particular note is Polytechnic University in St. Petersburg, Russia,
To enhance our HSE mindset, FMC has adopted four long-term
where FMC recently established a post-graduate Subsea Engineering
objectives:
program. Russia possesses more gas reserves than any other country
in the world, and their government and its national gas company,
• Maintain a consistent HSE focus
Gazprom, intend to develop fields located offshore in the Barents
• Achieve an injury-free workplace
Sea. By partnering with Polytechnic University, one of the most
respected technical schools in Russia, we are at the leading edge of
• Promote environmental stewardship
developing talent and having access to the best and brightest
engineers in Russia. • Proactively manage high-risk activities

The start of a new year is always exciting, and I believe 2008 holds
Going forward, we plan to expand that strategy to a broader
great promise for FMC, its employees and its shareholders. I am
range of educational institutions as we believe the benefits and
confident we will make great strides this year, facing each and every
opportunities are mutually beneficial to our industry and our current
challenge. By maintaining an HSE focus in all we do, we will meet
and future employees.
our objectives and finish this year as a safer and stronger company.

Total Recordable Injuries and Illnesses per 100 Full-Time Workers

10

8

6
2001 2002 2003 2004 2005 2006 2007
4
FMC Technologies 1.48 1.24 0.97 0.79 0.87 0.75 0.69
2 Manufacturing Industry 8.1 7.2 6.8 6.6 6.3 6.0 not avail.
Oil & Gas Machinery 6.1 4.1 4.4 2.9 3.6 4.2 not avail.
0
’01 ’02 ’03 ’04 ’05 ’06 ’07

8


Today, FMC Technologies is at the forefront of technical innovation
Positioned for the Future
and we are recognized as the preeminent solutions provider for

Shareholders Letter
During the course of fiscal 2007 we completed a seamless transition
many technical challenges throughout our industry. Our initiatives
in the company’s leadership by leveraging our breadth and depth of
and efforts have resulted in some significant achievements and many
management talent. That transition began at the start of 2007 with
future opportunities.
the appointment of John Gremp to Executive Vice President of
Energy Systems. A 32-year FMC veteran with a wealth of experience
As we embark on a new year, I believe FMC Technologies remains at
and industry knowledge, John now oversees our Energy Processing
a competitive advantage to continue to grow, add value to our
and Energy Production divisions. Bob Potter, a 35-year FMC veteran,
customers and provide a premium return to our shareholders.
was promoted to Senior Vice President of Energy Processing and
We are a unique company, formed of the most talented professionals
Global Surface Wellhead. Tore Halvorsen, a 28-year industry
in the industry. Our future successes are unlimited as long as we
veteran who has been with FMC since our purchase of Kongsberg
continue serving our customers well and add value in all activities
Offshore AS in 1993, was named Senior Vice President of Global
that we perform.
Subsea Production Systems.

Peter D. Kinnear
As we embark on a new year, we also are saying farewell to
President and CEO
Mike Murray, Vice President of Human Resources and
FMC Technologies, Inc.
Administration, who announced that he would retire from the
company in 2008 following a distinguished 35-year career.
From his first days as a Personnel Assistant up to his current role,
Mike has performed with the utmost dignity and professionalism
throughout his career. We wish him well in his retirement and thank
him for his many contributions over the years. Maryann Seaman
succeeds Mike as Vice President of Administration. Maryann brings a
wealth of knowledge and experience from her 21-year FMC career,
and she will continue to apply that knowledge while overseeing the
administration function, which includes Corporate Communications,
Human Resources, and Health, Safety and Environment.

Lost Workday Injuries and Illnesses per 100 Full-Time Workers

2.0

1.5
2001 2002 2003 2004 2005 2006 2007
1.0
FMC Technologies 0.25 0.31 0.17 0.14 0.13 0.18 0.10
0.5 Manufacturing Industry 1.8 1.7 1.6 1.6 1.5 1.4 not avail.
Oil & Gas Machinery 2.0 1.0 1.2 0.8 0.8 1.0 not avail.
0
’01 ’02 ’03 ’04 ’05 ’06 ’07

HSE focus in all we do 9


Revenue $M

3,000
Energy Production Systems
2,500
• Revenue of $2.9 billion was up 28 percent.
2,000
• Operating profit increased 51 percent to $287.9 million, primarily due to increased volume and
Operations Review

1,500
improved operating margin in subsea systems.
1,000
• Inbound orders of $5.0 billion increased 77 percent, and backlog at year-end was $4.2 billion,
up 105 percent. 500

• Subsea systems revenue increased 28 percent to $2.3 billion, inbound orders reached $4.4 billion, 0
’01 ’02 ’03 ’04 ’05 ’06 ’07
up 92 percent. Customer activity focused on deepwater projects, including three awards for subsea
processing systems. Backlog was at a record level of $3.9 billion, up 118 percent.

• Surface wellhead revenue increased 28 percent due to strong international market demand.

Energy Processing Systems
Revenue $M
• Revenue of $767.7 million was up 14 percent, primarily driven by service company demand
for fluid control equipment.
800
• Operating profit of $142.5 million improved 41 percent on increased volume in fluid control
700
and measurement solutions.
600
• Inbound orders increased 4 percent to a record $792.2 million, and backlog increased 8 percent to 500
$330.5 million. 400

300
Fluid control revenue increased 23 percent due to the strength of the WECO®/Chiksan® product line.
•
200
• Measurement solutions revenue was up 25 percent due to global demand for oil and gas pipeline 100
infrastructure. 0 ’01 ’02 ’03 ’04 ’05 ’06 ’07

Subsea Systems

Guidelineless Trees

Subsea Trees

Subsea Manifolds
Subsea Trees
Subsea Templates

10

FMC Technologies, Inc. Operations Review

Segment Operating Profit $M Inbound Orders / Order Backlog $M Capital Employed $M

800
300 5,500
Inbound Orders
5,000 700
250 Order Backlog
4,500
600
3,500
200
500

Operations Review
3,000
400
150 2,500
2,000 300
100
1,500
200
1,000
50 100
500
0
0 0
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’01 ’02 ’03 ’04 ’05 ’06 ’07

Segment Operating Profit $M Inbound Orders / Order Backlog $M Capital Employed $M

150 300
800
Inbound Orders
700
Order Backlog
600
100 200
500

400

300
50 100
200

100

0
0 0
’01 ’02 ’03 ’04 ’05 ’06 ’07
’01 ’02 ’03 ’04 ’05 ’06 ’07 ’01 ’02 ’03 ’04 ’05 ’06 ’07

Riserless
Light Well
Intervention

Subsea Separation
& Processing

Subsea Trees

solving customers’ challenges 11


The global reach of our businesses and continued customer demand Our robust subsea business received orders for 232 subsea trees and
for our innovative technology solutions resulted in record inbound related technologies and services during the year. Among the major
orders of $6.9 billion for 2007, an increase of 51 percent compared subsea projects awarded to FMC Technologies in 2007:
to 2006. As a result, year-end backlog will provide a solid base for
our continued growth in 2008 and beyond and was primarily • Norsk Hydro’s (now StatoilHydro) Ormen Lange extension, O2,
attributable to the success of our Energy Production and Energy Vega and Vega South projects in the North Sea
Processing segments.
• StatoilHydro’s Åsgard development in the North Sea
Energy Production, which includes our subsea and surface wellhead
Operations Review

operations, had record revenues of $2.9 billion in 2007, an increase • Woodside Energy’s Vincent project offshore Australia
of 28 percent compared to 2006. Energy Production also posted
record inbound orders of $5.0 billion in 2007, a 77 percent gain • Murphy Oil Corporation’s Azurite project offshore the Republic
compared to 2006. This performance was driven by the continued of the Congo
demand for our subsea systems and technologies. As a result, subsea
systems concluded 2007 with revenues of $2.3 billion and inbound • Chevron’s phase II of the Agbami project offshore Nigeria
of $4.4 billion, both record years and increases of 28 percent and
92 percent, respectively, compared to 2006. • Petrobras’ Cascade and Chinook development in the
Gulf of Mexico and Plangas project offshore Brazil

• Pemex’s Cantarell project in the Gulf of Mexico

• Shell’s Perdido project in the Gulf of Mexico and
Gumusut-Kakap project offshore Malaysia

• Total’s Pazflor project offshore Angola

FMC’S Subsea Tree Depth Records

1980 1985 1988 1992 1994

Bonito Marimba Marimba
619 ft 1,256 ft 1,613 ft Marlim
189m 383m Marlim
492m 2,561 ft
3,368 ft
781m
1,027m

12


Sales within Energy Processing, which includes fluid control, loading Located in deepwater offshore Angola, the Pazflor project will deploy
systems, measurement and material handling operations, continued three subsea separation systems and become the first development
to benefit from increased exploration and drilling activities across the in West Africa to utilize subsea separation technology. The scope of
globe. Sales for the year grew 14 percent to $767.7 million, while the project also includes 49 subsea trees and wellhead systems; three
operating profit increased 41 percent to $142.5 million for the year. 4-slot production manifold systems; production control and umbilical
Energy Processing’s inbound orders grew to $792.2 million, while distribution systems; gas export and flowline connection systems;
backlog improved to $330.5 million, an 8 percent increase over 2006. ROV tooling; and local support for installation and start-up activities.

One of the most important events to occur in 2007 was the delivery Our record performances during 2007 were not limited to financial

Operations Review
and start-up of our new separation technology. Tordis, the industry’s results. In July, we set a world record for the deepest subsea
first full-field commercial application for the subsea separation of oil, completion at 8,995 feet (2,750 meters) — or nearly 2 miles —
water and sand, was delivered to StatoilHydro in the summer of for the Independence Hub project. Located in the Gulf of Mexico,
2007, and it was installed offshore in the fourth quarter. Independence Hub is a deep-draft, semi-submersible platform
connected to 10 natural gas fields. FMC was awarded the initial
contract for the Independence Hub by Anadarko in March 2005, and
While Tordis was being prepared for transport and installation last
the scope of supply has since expanded to include 17 Enhanced
fall, FMC also was awarded two additional subsea processing
Horizontal Subsea Trees (EHXT) for Anadarko and partners Eni and
contracts, Petrobras’ Cascade and Chinook development and
StatoilHydro.
Total’s Pazflor project.

In response to recent hurricane activity in the Gulf of Mexico, new
Valued at $200 million, the Cascade and Chinook award included
government regulatory requirements have been implemented that
four horizontal subsea trees, three manifolds and control systems.
mandate modifications for platforms in the Gulf. Due to the cost of
In addition, the project includes two subsea horizontal electric
those modifications, operators are rethinking the way they execute
submersible pumping (ESP) systems. The technology benefits the
their shallow water projects. FMC Technologies’ shallow water
project by providing the necessary pump pressure to allow
completion system, or CM-1, is a simple and proven technology that
production to be boosted to the floating production, storage and
has been in operation for more than 30 years and is proving to be an
offloading (FPSO) vessel from its location on the ocean floor
efficient option for customers to develop shallow reservoirs instead
8,500 feet (2,600 meters) below the surface.
of using platform developments that utilize dry trees. We have also
developed a supply chain for shallow-water trees to provide off the
shelf, packaged solutions that have saved customers time and money.

1999 2004 2006 2007

Roncador
Shell Coulomb
6,080 ft
7,570 ft
1,853m
2,308m Anadarko Merganser
8,000 ft
Anadarko Cheyenne
2,438m
8,995 ft
2,743m
World Record

shaping the future 13


In 2006, Pemex awarded FMC Technologies a two-system Our material handling business continued its profitable growth
development utilizing our CM-1 technology in an effort to reduce efforts during a year that was highlighted by a strategic acquisition,
development costs while increasing oil recovery at its Cantarell field, business consolidation and the opening of a new facility overseas.
which is located in 150 feet of water and is the largest oil field in In June 2007, we announced the acquisition of Technisys, Inc., an
Mexico. This was the first time Pemex had installed subsea electrical integration company that provides power, distribution and
production systems in the Gulf of Mexico, and the results were so control solutions to the mining, power generation and water
successful that Pemex awarded FMC Technologies an additional treatment industries. Both companies have enjoyed a long
contract for 10 more systems in 2007. Pemex estimates that their use partnership, and the merger is a strategic effort to leverage both
of the CM-1 systems will reduce development time by approximately companies’ strengths in the material handling market. Also in 2007,
Operations Review

12 to 18 months while also increasing oil recovery at the Cantarell our operation in Changshu, China, completed its first year of
field. operation with positive results as we completed the transition of
our light industry product line from our Homer City, Pennsylvania,
operation into the Changshu and Tupelo, Mississippi, facilities.
Financial results for our fluid control and measurement solutions
businesses both reached record highs in 2007. Fluid control’s
performance was driven by the successful introduction of our new Overall, the company had an excellent year. Operating profit for
generation Triplex and Quintuplex well service pumps, both of which our energy businesses has grown at an annual compounded rate of
generate significantly more output than other pumps available on the 43 percent over the last five years. Given the strength of our current
market. Our WECO®/Chiksan® products also continued to experience backlog, the positioning of our leading technology and the positive
strong customer demand during 2007 and contributed to the success outlook for deepwater activity, we are confident that we are well
of our fluid control business. Measurement solutions’ results positioned for the future to continue to grow our company.
benefited from the growing pipeline infrastructure requirements to
deliver oil and gas throughout the world. Continued market demand
for liquid natural gas (LNG) products at both import and export
terminals led to a strong year for our loading systems business.

Changshu, China Facility

We are confident
that we are well positioned
to continue to grow our
company.

14


Subsea Manufacturing Facilities , Customer Support Centers and Major Projects

Åsgard
Kristiansund
Stavanger
Frame Agreement
Kongsberg
Aberdeen
Bergen
Dunfermline

Operations Review
St. John’s

Houston

Cascade

Perdido
San Fernando Port Harcourt Nusajaya Gumusut
Abidjan
Cantarell
Malabo
Agbami Singapore
Luanda
Azurite

Pazflor Jakarta

Pluto
BC-10

Rio de Janeiro Perth
Macaé

Major Manufacturing Facilities Customer Support Centers Major New Projects
Dunfermline, Scotland Aberdeen, Scotland Project Customer Location

Houston, Texas Abidjan, Ivory Coast Agbami Chevron Nigeria

Jakarta, Indonesia Bergen, Norway Åsgard StatoilHydro North Sea

Kongsberg, Norway Houston, Texas Azurite Murphy Oil Republic of Congo

Nusajaya, Malaysia Kristiansund, Norway BC-10 Shell Brazil

Rio de Janeiro, Brazil Luanda, Angola Cantarell Pemex Gulf of Mexico

Singapore Macaé, Brazil Cascade Petrobras Gulf of Mexico

Malabo, Equatorial Guinea Frame Agreement StatoilHydro North Sea

Perth, Australia Gumusut Shell Malaysia

Port Harcourt, Nigeria Pazflor Total Angola

San Fernando, Trinidad & Tobago Perdido Shell Gulf of Mexico

Singapore Pluto Woodside Australia

Stavanger, Norway

St. John’s, Newfoundland

supporting customers worldwide 15


A key driver for FMC Technologies’ growth has been the ability of our employees to develop strong relationships with our customers.
By understanding and responding to their needs and challenges, we are able to design, manufacture and deliver technological solutions that
help our customers in many ways. This level of understanding and attention to detail has resulted in strengthened customer relationships and
our position as the industry’s technology leader.

StatoilHydro’s Tordis Subsea Separation Module
Technology & Innovation

We add significant value to our customers when our technologies allow them to:

• Increase recoverable reserves

• Increase production rates

• Decrease drilling and completion costs

• Decrease field development costs

• Decrease field operating costs

16

FMC Technologies, Inc. Inc. Shareholders Letter
FMC Technologies, Technology & Innovation

FMC has established multi-year, subsea system alliances with a Our technology was first used with StatoilHydro’s Tordis project in
number of strategic customers. The first alliance began in the 1990s the North Sea, which began operation in January 2008. In this
with StatoilHydro. Two years later, we entered into technology application, the topside processing facilities could no longer handle
development agreements with StatoilHydro, Shell, Total and the increasing levels of water being produced from the subsea wells.
ExxonMobil to develop advanced standards for subsea field By developing a system to separate the oil, gas, water and sand on
development. FMC Technologies committed to, and succeeded in the seabed, the excess water is now reinjected into the formation
developing, innovative and cost-effective technical solutions that instead of flowing to the surface. This reinjection allows
served as the foundation for today’s subsea efforts in our industry. hydrocarbons to displace the water that once filled most of the
flowline and increases the hydrocarbon production rate. It also
Subsea Separation and Processing overcomes back-pressure in the flowline through the use of a
Subsea separation and processing enables our customers to multi-phase booster pump which increases the production rate and
separate water and gas from the wellstream at the ocean floor. the total recovery of hydrocarbons, extending the productivity and
The technology increases the productivity of fields that are life of the field.
experiencing declining recovery rates, and it allows for development
Our subsea processing systems are also being used in new
of fields that otherwise might be deemed uneconomic to produce.
developments for Shell, Petrobras and Total. Each of the

Subsea separation and processing also allows operators to extend the
developments has different characteristics where separation and/or
life cycle of an existing field for years, potentially decades, while
boosting is essential for efficient production.
increasing recovery rates, improving flow management and enabling
the development of otherwise marginal fields.

Additional benefits of subsea processing include a reduced
environmental impact as well as potential avoidance of
environmental risks. For example, reinjection of water at the seabed
after separation from the production stream eliminates the
traditional step of treating the water in a topside facility. In addition,
subsea processing can be performed in a platform-free scenario by
tying the new field to an existing offshore facility or linking it
directly to shore-based facilities. This eliminates the need for an
additional platform in the ocean, thereby reducing offshore logistic
activities and the resulting impact on the environment.

Tordis Subsea Separation System

gas

Subsea separation and
oil
processing allows
water
operators to extend the
sand

life cycle of an existing
field for years.

developing future technologies 17


Major projects in Brazil and in the Gulf of Mexico are both
characterized by ultra-deepwater and low reservoir pressure, which
require artificial lift with Electrical Submersible Pumps (ESPs) in
order to flow the hydrocarbons to the surface. To allow for
commercial development of both fields, subsea separation systems
are needed to separate the natural gas from the oil and water at the
seabed so that the oil and water can be pumped to the surface by the
ESPs, and to mitigate the risk of cavitation in the pumps.

Petrobras’ Cascade and Chinook fields in the Gulf of Mexico are
characterized by heavy oil and low reservoir pressure. The subsea
processing solution for this project will include ESPs mounted
horizontally at the seabed to boost production from the subsea wells.

Total’s Pazflor project in Angola is yet another unique application of
our subsea processing technology. Development of this field was not

considered economically viable due to the likelihood of hydrate
formation, causing potential blockages within the flowlines.
Gas/Liquid Separation Technology
To address this issue, our subsea separation technology will be used
to first remove the gas at the seabed. Hydrocarbon flow will then be
boosted topside by the subsea multi-phase pumps. The end result is
successful use of subsea processing to help enable the development
of the field by mitigating the risk of hydrate formation.

As the search for hydrocarbons takes our customers and technologies
into deeper water, we continue to develop products to overcome a
variety of deepwater challenges for existing and new development
projects. Our current high-pressure, high-temperature (HP/HT) subsea
completion systems are capable of handling extreme pressures and
temperatures of up to 15,000 pounds per square inch (psi) and
300 degrees Fahrenheit. Our innovative subsea systems have clearly
differentiated us in our industry, and have led to the receipt of all
five recent commercial subsea processing contracts awarded to date
in our industry.

Total’s Pazflor Project

We continue to
develop products to
overcome a variety of
deepwater challenges
for existing and new
development projects.

18

FMC Technologies, Inc. Technology & Innovation

Riserless Light Well Interventions
The evolution of deepwater developments and subsea operations has
allowed energy companies to expand their exploration efforts to
satisfy worldwide demand for hydrocarbons. The environmental
conditions that characterize subsea exploration and development,
including harsh climates and extreme water depths, pose challenges
for operators as they search for economical solutions to complete,
produce, maintain and monitor subsea wells and trees. As the
number of subsea developments continues to increase and are placed
at depths of up to two miles, customers need cost-effective solutions
that allow them to properly maintain their subsea wells to ensure
optimum production levels.

Typically, subsea wells require “in the wellbore” intervention efforts
every five to seven years and often require the availability of a

deepwater rig to complete the work. Due to the limited availability of
offshore drilling rigs, intervention service for subsea wells occurs on
an infrequent basis. As a result, subsea wells can experience reduced
efficiency and productivity, resulting in lower production rates and
reduced reserve recoveries. As reservoir conditions in subsea wells
become more challenging, well maintenance will play a key role in
the viability of subsea completions.
Riserless Light Well Intervention System
To address our customers’ needs for more efficient subsea well
maintenance, FMC Technologies developed the Riserless Light Well
Intervention (RLWI) system.

Unlike traditional intervention methods that require large and
expensive drilling rigs, our RLWI solution uses less expensive
monohull units, which are also smaller and more nimble. Vessel
availability is greatly improved and well intervention costs are
reduced dramatically, increasing the amount of intervention work
that can be performed, which ultimately results in increased oil
recovery.

RLWI System Operation from Vessel

The RLWI technology
can perform the
majority of functions
that can be completed
by the more expensive
traditional intervention
methods.

19

fmc technologies 2007ar

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